Norway Receives $30B Investment Pledge to Maintain High Gas Output for the Next 5 Years

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Norway Receives $30B Investment Pledge to Maintain High Gas Output for the Next 5 Years

Fri, 01/13/2023 - 10:56
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Flag of Norway (© Shutterstock/Tatohra)
Flag of Norway (© Shutterstock/Tatohra)

Operators have pledged $30 Billion for developing new gas fields in Norway while extending the lifetimes of the actively producing fields, the Norwegian Petroleum Directorate said on Monday, January 9, 2023.

According to NPD, the investment pledge will help the country to sustain the current high volumes of gas production as it becomes Europe’s reliable gas supplier.

“These are remarkable investments for the future. This will help ensure that Norway can continue to be a reliable supplier of energy to Europe”, said NPD Director General Torgeir Stordal.

“Only rarely have we seen so much oil and gas produced on the Norwegian shelf as was the case last year [2022] – and only rarely have we seen such significant investment decisions,” the NPD said in its annual overview of the investment activity and productions on the Norwegian Continental Shelf.

According to the directorate, the country’s extremely high gas and oil production will continue to grow in the future, with gas production projected to be consistent around the 2022 levels for the coming four to five years.

Norway’s sustained high gas production is attributed to the higher number of actively producing fields following the launch of several start-ups in 2022, with older fields upscaling production and lifetimes beyond the initial expectations, the NPD said.

In the summer of 2022, the country’s authorities approved applications from several operators to boost production from many gas production fields to cope with the unprecedented skyrocketing demands from its key partners, including the EU and the UK, who were scrambling to fill up their gas banks ahead of the winter.

Waning Dependence on Russian Gas

The new reality of the Russian war in Ukraine saw Norway become Germany’s single-largest gas supplier, replacing Russia, which enjoyed decades of energy supply monopoly in Europe.

The unprecedented shift in gas imports from Norway led to a drop in Germany’s gas import from Russia by 12.3% from 2021 volumes, according to last week’s report by the German Federal Network Agency, Bundesnetzagentur.

Unlike in 2021, when Russia supplied 52% of Germany’s gas imports, the share slumped to 22% in 2022, with Norway supplying up to 33% of the gas imports, according to the German Regulator.

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